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Heriot-Watt University


Introduction to Reservoir Engineering

Adrian C Todd

History of Reservoir Engineering

Traced to mid 1930s

1994 Dake in Practise of Reservoir Engineering.

Reservoir Enginering shares the distinction with geology in
being one of the underground sciences of the oil industry,
attempting to describe what occurs in the wide open spaces
of the reservoir between the sparse points of observation the wells

Integration of Reservoir Engineering

Roles of the Reservoir Engineer

Contributing with geologists and

petrophysicists in estimation of oil-in-place
Determining fraction of oil-in -place that can
be recovered.
Attach a time scale to the recovery.
Day-to-day operational reservoir engineering
throughout the project lifetime.

Activities of Reservoir Engineering

Reserve Estimation

Development Planning

Production Operations Optimisation

Reserve Estimation

The reserves are the main assets of an oil

Quantifying reserves and recovery factor is an
ongoing role of the reservoir engineer.
Basic data not always straightforward.
Reserves can be affected by the development

Reserve Estimation

estimates from
seismic interpretation

Reserve Estimation

Log Analysis
estimates of porosity
and fluid saturation

Reserve Estimation

Laboratory measurements to measure

recoverable oil

Reserve Estimating

Not exclusive to reservoir engineers

Volumetric estimates of reserves obtained at
various stages
STOIIP - stock tank oil initially in place

Optimal Development Planning

Large up front investment

Optimal Development Planning

Requires detailed understanding of the

reservoir characteristics

Optimal Development Planning

Various development options to be considered

Production Operations Optimisation

Rarely do reservoirs perform as predicted

The reservoir engineering model has to be
updated in line with the production behaviour.

Reservoir Engineering Techniques

Traditional reservoir engineering tools were designed

around slide rule and graph paper.
Increasingly advanced computing capability is
enabling large simulations to be carried out

Available data

Geophysical surveys

Well logs



Pressure data

Formation fluid content data

Tools of the Trade

Seismic maps

Structural maps

Well logs

Porosity maps


Isopach maps

Understanding the
geological model

Geological model

Petroleum Reserves Definitions

Subject of study for some time.

Agreed definitions by SPE and WPC in 1996.

Recognises that not practical to have precise

classification because of different forms of
occurrence, wide characteristics, uncertainties
of geological environment, and evolution of

Petroleum Reserves Definitions

Essential that governments and industry have

a clear assessment of quantities available and
anticipated within practical time frame through
additional field development, technological
advances, or exploration.
Important that a consistent nomenclature be
used by industry to define reserves.

Reserves Definitions

Reserves are those quantities which are

anticipated to be commercially recovered from
known accumulations from a given date
Reserve estimates involve some degree of
Uncertainty depends on reliable geological and
engineering data available at the time of estimate
and its interpretation.

Reserve Uncertainty

Relative uncertainty expressed by placing

reserves into two classifications.

Unproved-less certain than proved. Further
subdived to express increasing uncertainty.



Methods of Estimation

A single best estimate of reserves bases on
known geological, engineering, and
economic data.

Known geological, engineering and economic
data are used to generate a range of
estimates and their associated probabilities.

Proved Reserves

Those reserves which by analysis of

geological and engineering data , can be
estimated with reasonable accuracy to be
commercially recoverable from a given date
forward from known reservoirs and under
current economic conditions, operating
methods and government regulations.

Developed and Undeveloped

Proved Reserves

Deterministic methods
reasonable certainty to express a high degree
of confidence that quantities will be

Probabilistic methods
at least 90% probability that the quantities
actually will equal or exceed the estimate.

Proved Reserves

Reserves are considered proved if

commercial producibility is supported by
actual production or formation tests.
In certain cases proved reserves may be
allocated on the basis of well logs and/or core
analysis that indicate that the reservoir is
hydrocarbon bearing and analogous to
reservoirs in the same area that are producing
or have demonstrated the ability to produce
on formation tests.

Proved Reserves

The area of the reservoir includes:

the area delineated by drilling and defined by contacts,
if any.
The undrilled portions of the reservoir that can be
reasonably judged as commercially productive on the
basis of available geological and engineering data.
If no fluid contacts, lowest occurrence of hydrocarbons
controls the proved limit unless indicated by definite
geological, engineering or performance data.

Test 1

There are 950 MMstb of oil initially in place in a reservoir.

It is estimated that 500 MMstb can be produced. Already
100MMstb have been produced. What are the reserves?









The reserves are:


Test 1

There are 950 MMstb of oil initially in place in a reservoir.

It is estimated that 500 MMstb can be produced. Already
100MMstb have been produced. What are the reserves?









The reserves are:


Test 3

What is wrong with the following statement ?

Reserves are those quantities which are
anticipated to be recovered from a petroleum

Test 3

What is wrong with the following statement ?

Reserves are those quantities which are
anticipated to be recovered from a petroleum

Reserves are those quantities which are
anticipated to be commercially recovered.
Economics is very important aspect


Oil and gas price ?


Future economic trends?

Discount factors etc?


The current economic conditions are the basis re;- prices

government regulations

Test 4.

We have a structure in an area which we expect to explore.

We anticipate it to contain a STOIIP of 2000MMstb, and a
recovery factor of 65% using primary recovery (30%),
secondary (25%) and tertiary (10%) recovery methods.
What are the reserves?
Answer:SPE/WPC - zero. Intentions are not a basis
for reserves. No well has yet been drilled.
Some companies will allocate potential reserves for internal
use. Cannot be used for public or government figures.

Requirements for proved reserves

from seismic and geological data.

Petrophysical logs
Well test results and rock properties from recovered
Necessary facilities for processing and transport
either in place or will be installed as backed up by
formal contract

Contributions to the Proved Reservoir Area

This comes from the drilled and produced

the definition of the gas and oil and water
or the highest and lowest observed level of
Also the undrilled area adjacent to the drilled can
be used.

Reserves - progression with time

Probabilistic Representation of Reserves

In the deterministic approach volumes are

determined by calculation of values
determined for the various parameters.
With the probabilistic approach statistical
analysis is used. e.g. Monte Carlo methods

Probabilistic Representation of Reserves

Proven - 90% probability

Probable - difference
between 50 & 90%
Possible - difference between
10 & 50%

Probabilistic Representation of Reserves

Some measure of subjectivity. For each element there is a

probability function.

Probabilistic Representation of Reserves

Proven = 500MMstb,

Probable =740-500=240MMstb

Possible =860-740=120MMstb

Probabilistic Representation of Reserves

As field is produced the shape of the curve changes. Probability

converted to recovery leaving less uncertainty in reserves.

Volume in-place calculations

Volume of oil and gas in-place, V, depends on:

aerial coverage of reservoir , A.

Thickness of the reservoir, hn.

Pore volume, expressed by porosity,

Proportion of pore space occupied by hydrocarbon, (

the saturation ), 1-Sw

V=Ah n (1 Sw )
When expressed as stock tank volumes
equation divided by Bo or Bg

V=Ah n (1 Sw ) / Bo

Volume in-place calculations & Reserves

STOIIP=V=Ah n (1 Sw ) / Bo

Reserves = STOIIP R F x
Where RF is the recovery factor
A - will vary according to category:

Evolution of the reserve estimate

Suggest this location

Evolution of the reserve estimate

Evolution of the reserve estimate



Evolution of the reserve estimate

Evolution of the reserve estimate

Evolution of the reserve estimate

Evolution of the reserve estimate

Deterministic perspective as indicated by top structure map

Formation Volume Factors Oil,Bo and Gas, Bg

Formation volume factors convert reservoir volumes

to surface volumes.
They do not vary significantly across the reservoir
compared to other rock related properties.
In some reservoirs there is a compositional gradient
which results in variations in the oil formation
volume factor
In this case average or values measured at depth
would be preferred

Recovery Factor

Proportion of hydrocarbons recovered called recovery


Influenced by a range of properties.

Rock and fluid properties.

Drive mechanisms.

Formation characteristics & heterogeneity

Development process

Geometry and location of wells

Other Appraisal Tool - Production Test

One of the moat powerful tools for reservoir

Used to evaluate the characteristics of the
reservoir under realistic conditions.
Exploration well is turned temporally into a
producing well and downhole pressure

Production test - Well Test

Key aspects >
Producing interval
Downhole pressure
Oil & Gas Flowrates

Well Test
2 rate test
Initial downhole
Pressure declines
in relation to flow 1
Pressure declines
in relation to increased
flow 2
Well shut in
and pressure
builds up
Draw down and
build up curves
analysed to give kh

Other Appraisal Tools

Nature of the Fluids - PVT

important for reservoir behaviour and processing.

Pressure profile in a well.

powerful measurements to aid in reservoir structure and
dynamic continuity.

Core analysis
a cross check for downhole measurements and unique

Development Planning

An evaluation of alternative plans

Well data and Test Results

Reservoir maps

Material Balance

Drive mechanisms

Reservoir models

Techno economics

Land developments higher degree of flexibility

Offshore developments limited flexibility after production system ordered

Reservoir maps

An evaluation of alternative plans

Development Planning

Drive mechanisms

Simple and complex models

Displacement models for injection processes

Recently, integration of geological and

geophysical perspectives providing greater
confidence in simulation models

Drive mechanisms
Water Drive

Gas Drive




Development Planning

Production profiles

oil, gas and water

Well requirements

Topside facilities


Reducing uncertainty is the key issue of the

decade and not least in reservoir engineering and
its related disciplines.

More information gives less uncertainty.

Collecting data costs money

Greater cost the delay on the project.

Tension between reservoir engineers and project


Uncertainty - Reservoir

Static properties

Reservoir structure

Reservoir properties, k, h etc

Reservoir connectivity

Impact of faults

thief sands

Uncertainty - Reservoir

Dynamic properties

Relative permeabilities etc.

Fluid properties

Aquifer behaviour

Well productivity ( fractures, well type, condensate

drop-out etc.

Uncertainty - Reservoir

Material Balance Equation


Water Influx


Material Balance Equation

Examines the pressure -volume behaviour of an entire

Tank model of the reservoiur
Engineer fits a simple model to the data and predicts
future performance
Model gets updated to match production -history
Reservoir simulation models comprise many aspects
of material balance

Material Balance Equation

N p Bt Bg R si R p Wp C
Bg Bgi
Sw c w c f
1 m
p We



Known : Production data

Hydrocarbon Properties
Reservoir Properties
Pressure drop
Unknown : Reserves
Water Influx

Np, Rp, Wp
Bt, Bti, Bg, Bgi
Sw, cw, cf, m

Known : Reserves,Water influx, Hydrocarbon properties,

Reservoir properties.

Unknown : Oil & Gas production as a function of pressure drop

Production Operations Optimisation

The development phase

covers period from continuous production to abandonment.

When to stop a techno-economic decision.

Best reservoir engineering data during production stage.

Through production the reservoir yields its secrets.

Hydrodynamic continuity revealed by post production

pressure surveys.
Rise of fluid contacts needs monitoring

History Matching

Throughout production the comparison of the actual

performance with that predicted during appraisal stage is
monitored. It is during this stage that the reservoir
simulation model is under examination.

History Matching. - The update of the model to fit

actual performance.

Clearly a model that cannot predict the past is no good for

predicting the future!
Computing power is enabling integration of geological input
with physics of flow etc. - Integrated reservoir simulation.

Production Operations Optimisation

Good production records required.

History Matching
The update of the model in line with actual

Reservoir simulation success depends on

detail of reservoir description and complexity
of reservoir.

Reserve Estimating

When production data available reserves

estimates can be refined.
Decline curve analysis
Material Balance Equation

Computer based reservoir simulation

Decline curve analysis

Plots of production rate versus time, or

production, on a variety of co-ordinate scales
Straight line is considered to characterise
behaviour and is extrapolated to predict future

Phases of Development

During development a number of phases

the build up phase

with predrilling may not happen

the plateau phase

the reservoir is producing at design
capacity for the facilities.

The decline phase

the reservoir no longer able to
produce at capacity.
Plateau phase can be extended, eg
use of artificial lift, downhole pumps
or gas lift.

Economic limit - will vary

according to project type
and size

Improving Recovery
Three phases of recovery

Primary recovery
recovery obtained through natural energy of the reservoir

Secondary Recovery
energy is supplemented by injection of fluids, gas or water.
To maintain or partially maintain pressure.
Two types of oil left.
High saturation in unswept part- by passed oil
Lower saturation in swept part - residual oil saturation

Enhanced oil recovery, EOR.

The target for by-passed and residual oil

Enhanced or Tertiary Recovery

Improved Oil Recovery,
IOR covers all approaches to
improve hydrocarbon

The Uniqueness of the Reservoir

Reservoir Behaviour

Reservoir Development

Early agreement to
reservoir description
speeds development

Unique & Static


Reservoir Description

Leman Gas Field UK after first exploration well

Leman Gas Field UK 10years after first exploration well

Reservoir Engineering

A broad fundamental background of basic

sciences and engineering.

The behaviour of the reservoir rocks.

The properties of the contained fluids

Fluid through through reservoir rocks

Reservoir drive mechanisms

How things have changed !!